Afghanistan’s financial system on the verge of collapse, lender warns, as US keeps nearly $ 10 billion in frozen Taliban reserves

Taliban operatives stand near the destroyed Central Intelligence Agency (CIA) base northeast of Kabul on September 6, 2021 after the United States withdrew all of its troops from the country.
  • The Afghan financial system is in an “existential crisis,” said the head of one of its major lenders.
  • He told the BBC that people were just withdrawing money and “most banks don’t work.”
  • The United States froze nearly $ 10 billion in reserves belonging to the Afghan central bank after the Taliban took control.
  • See more stories on the Insider business page.

The Afghan banking system is on the verge of collapse, warned the head of one of the country’s largest lenders.

Syed Moosa Kaleem Al-Falahi, Managing Director of the Islamic Bank of Afghanistan, told the BBC that the Afghan financial industry faces an “existential crisis” as customers panic after the Taliban took control of the country last month, and Western nations and agencies freeze the country’s funds in response.

“There are huge withdrawals right now,” he said.

“Only withdrawals take place, most banks do not operate and do not provide full services.”

United States frozen nearly $ 9.5 billion in assets owned by the Afghan central bank last month. Most of this money is held by the Federal Reserve Bank in New York.

And the IMF said last month that Afghanistan could no longer access its resources. The World Bank also announced that it was suspending funding for projects in Afghanistan.

The un said earlier this month that the frozen assets of Afghanistan should be released to avoid “a serious economic downturn”.

Al-Falahi warned that the freezing of funds by Western countries and agencies means Afghanistan is turning to China and Russia for help.

“It seems that sooner or later they will succeed in having a dialogue,” he said. China already has sent aid to Taliban-led Afghanistan and promised tens of millions of dollars.

Source link

Don F. Davis

Leave a Reply

Your email address will not be published.